China's Consumer Market Rebounds: Trade-In Program Drives Growth

China's consumer market has shown signs of recovery, with total retail sales of consumer goods increasing by 4.8% year-on-year in October. This rebound, the second consecutive month of growth, can be attributed to the national trade-in program, which has significantly contributed to the sales of specific commodities. Let's delve into the details and explore the impact of this program on the consumer market.

The national trade-in program, introduced in March 2024, has been a driving force behind the growth in consumer spending. This program offers subsidies for consumers replacing products ranging from phones to cars, encouraging them to upgrade and replace their products. The impact of this program has been evident in various consumer goods categories, with household appliances and audio-visual equipment reporting a 39.2% surge in combined sales compared to a year earlier. Additionally, stationery and office supplies saw an 18% jump in sales, while furniture and automobile sales increased by 7.4% and 3.7% respectively.

The trade-in program has not only boosted sales but has also influenced consumer behavior and preferences. By offering subsidies for product replacement, the program has stimulated consumer demand and shifted preferences towards upgrading and replacing products. This has led to a 1.2 percentage point increase in the overall retail sales growth in October 2024.

The trade-in program has also contributed to the market share of participating companies compared to non-participating ones. The sales of major trade-in products contributed 1.2 percentage points to the overall retail sales growth in October, indicating that participating companies benefited from the program and likely gained market share.

In conclusion, the national trade-in program has played a significant role in driving the rebound of China's consumer market. By encouraging consumers to upgrade and replace their products, the program has boosted sales in various consumer goods categories and influenced consumer behavior and preferences. As the program continues to gain traction, it is expected to further contribute to the growth of the consumer market and the market share of participating companies.

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